U.S. trade body throws out 300% tariffs against Bombardier C Series

Bombardier Inc. has won its fight against almost 300 per cent duties applied to U.S. imports of its C Series aircraft.

The U.S. International Trade Commission in Washington, D.C., ruled Friday that “100- to 150-seat large civil aircraft from Canada do not injure U.S. industry.”

Boeing had claimed it stood to suffer harm by the planes, even though aircraft destined for U.S. customers are now slated to come from a new assembly line near the Airbus facility in Mobile, Ala.

Montreal-based Bombardier needed to win support from three of four commissioners to put a stop to the punitive tariffs placed on its C Series aircraft, but the decision was unanimous.

Victory for Canada and Bombardier

It’s a victory for Canada as well as Bombardier and should “put some wind in the sails” of current NAFTA negotiations, said Karl Moore, an associate professor of the Desautels Faculty of Management at McGill University in Montreal.

It’s “a great, almost stunning victory for Bombardier, given some of the comments of the Trump administration and some other people, but it strikes me as a very sound decision,” he told CBC News.

“When you look at it as an industry analyst, this seems to be the right decision — that Boeing was not hurt by the C Series and Delta’s decision to buy it, particularly in light of Airbus’s taking over the ownership of C Series and building it in Alabama.”

Boeing launched the trade case last April, arguing that governments in Canada and Britain subsidized the plane’s development and allowed Bombardier to sell it at unfairly low prices.

The Department of Commerce imposed anti-dumping and countervailing duties totalling 292.21 per cent.

The lone U.S. customer, Delta Air Lines Inc., was originally expected to receive the first of its firm order for 75 CS100 planes in the spring, but now plans to wait until the aircraft are assembled in the United States.

In a final submission to the USITC, Bombardier said it expects Boeing will likely respond by filing a new petition once there is a new U.S. order for the C Series because it doesn’t believe the Alabama line will be built.

Still under threat

Bombardier said the threat of a new petition makes its proposed partnership with Airbus to build a U.S. full assembly line a must, regardless of how the case is resolved.

Moore said Boeing still has the potential to use legal wrangling to further discourage sales of the C Series, but he expects the global giant will be content to grab the lion’s share of the marketplace.

Bombardier called the decision “a victory for innovation, competition and the rule of law.”

The U.S. ITC “saw through Boeing’s games,” Olivier Marcil, vice-president of external relations at Bombardier, said Friday in Montreal, adding that Boeing does not have an aircraft that competes in the same sector of the market as C Series.

He hailed the efficiency and innovative qualities of the C Series, but said it is necessary to move ahead on its “strategic partnership” with Airbus. After the threat of duties was removed, the company can build sales of the aircraft, he added.

Delta Air Lines said it was pleased with the ruling and called the Boeing complaint an “attempt to deny U.S. airlines and the U.S. travelling public” access to the Bombardier C Series.

Unifor leader Jerry Dias hailed the ruling on behalf of Canadian workers, but said it “leaves a lot of unanswered questions, because of course Bombardier turned over the C series to Airbus to a large extent.”

“There’s absolutely no reason now for the C Series to be built in Mobile, Alabama,” he argued, adding that half the C Series-related jobs are already in the U.S.